Smt Alpana Saha ( L/H of Late P.K.Saha), Burdwan V. A.C.I.T Cir - 2,Burdwan, Burdwan

ITA 1744/KOL/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4908 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 17-03-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 04-06-2013
• Court: TRIBUNAL
• Assessee Lawyers: SOUMITRA CHAUDHURY
• Keywords: Retrospective amendment; Initiation of penalty proceedings
• Section: 143(3); 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA [BEFORE SHRI MAHAVIR SINGH, JM & SHRI M. BALAGANES H, AM] I.T.A NO.1744/KOL/2013 ASSESSMENT YEAR: 2005-06 SMT. ALPANA SAHA VS. ASSISTANT COMMISSIONER O F INCOME-TAX, (PAN:AKCPS6145C) CIRCLE-2, BURDWAN. ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 17.03.2016 DATE OF PRONOUNCEMENT: 21.03.2016 FOR THE APPELLANT: SHRI SOUMITRA CHAUDHURY, ADVOC ATE FOR THE RESPONDENT: SHRI SALLONG YADEN, ADDL. CI T, SR. DR ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A)-DURGAPUR VIDE APPEAL NO. 16/CIT(A)/ASL/CIR-2/BWN/2009-10 DATED 06.03.2013. A SSESSMENT WAS FRAMED BY ACIT, CIR- 2, BURDWAN U/S. 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2005-06 VIDE HIS ORDER DATED 31.12. 2007. PENALTY WAS IMPOSED BY ACIT, CIR- 2, BURDWAN U/S. 271(1)(C) OF THE ACT VIDE HIS ORDER DATED 29.05.2009. 2. THE ONLY ISSUE IN THIS APPEAL OF ASSESSEE IS AG AINST THE ORDER OF CIT(A) CONFIRMING THE PENALTY LEVIED BY AO U/S. 271(1)(C) OF THE ACT ON E STIMATED INCOME. 3. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS EN GAGED IN TRADING OF INDIAN MADE FOREIGN LIQUOR (IMFL) AND BEER. THIS BUSINESS IS CARRIED O N BY ASSESSEE UNDER EXCISE LICENCE GRANTED BY STATE EXCISE AUTHORITIES AND ALL PURCHASES, SALES A ND STOCKS ARE MONITORED AND CONTROLLED BY EXCISE AUTHORITIES. A SURVEY U/S. 133A OF THE ACT WAS CONDUCTED ON THE BUSINESS PREMISES OF THE ASSESSEE ON 17.09.2004 FROM WHERE SOME STOCK RE GISTERS, INVOICE OF PURCHASES, CASH /SALE MEMOS ETC. WERE FOUND AND IMPOUNDED. THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS EXAMINED THE IMPOUNDED CASH/SALE MEMOS AND SELECTED ON RANDOM BASIS FROM MONTH OF APRIL, 2004 TO NOVEMBER, 2004 AND ESTIMATED THE SALE OF 25 DAYS WHICH WERE WORKED OUT AT RS.3,47,508/-. ACCORDINGLY, THE AO ESTIMATED THE S UPPRESSED SALE FOR FY 2004-05 RELEVANT TO THIS AY 2005-06 AT RS. 45 LACS. ACCORDING TO AO, G P RATE DECLARED ON THE GROSS SALES IS AT 13.69% AND ON NET OF LITERAGE FEES SALE THE GP RATE WAS DECLARED AT 16.39%. ACCORDINGLY, AO WORKED OUT UNDISCLOSED SALES AT RS.7,37,550/-. THE AO ALSO MADE ADDITION OF CASH FOUND DURING 2 ITA NO.1744/KOL/2013 SMT. ALPANA SAHA, AY 200 5-06 THE COURSE OF SURVEY AT RS.1,08,540/-. THE AO INIT IATED PENALTY PROCEEDINGS U/S. 271(1)(C) FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. TH IS ADDITION OF RS.7,37,550/- WAS ESTIMATED BY CIT(A) AT RS. 1 LAC AND FOR THIS, CIT(A) OBSERVED IN MY CONSIDERED OPINION, IT WILL MEET THE ENDS OF JUSTICE IF THE ADDITION IS ESTIMATED TO RS. 100000, IS CLEAR AND EXPLICIT. THIS ESTIMATION WAS ALSO CONFIRMED BY TRIBUNAL. ACCORDINGLY, THE A O STARTED PENALTY PROCEEDINGS. 4. THE AO LEVIED PENALTY U/S. 271(1)(C) OF THE ACT ON THIS RS. 1 LAC AS ESTIMATED BY CIT(A) AMOUNTING TO RS.30,627/- FOR BOTH THE CHARGES OF CO NCEALMENT OF INCOME AS WELL AS FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME BY O BSERVING AS UNDER: THEREFORE, THE ASSESSEES CASE FALLS WITHIN THE P URVIEW OF SECTION 271(1)(C) OF THE ACT. HENCE, IN THE LIGHT OF ABOVE DISCUSSION, PENALTY U/S. 271(1)( C) FOR CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS IS IMPOSABLE IN THE CASE OF THE ASSESSEE. I, THEREFORE, IMPOSE A PENALTY OF RS.30,627/- U/S. 271(1)(C) OF THE INCOME TAX ACT, 1 961 AS COMPUTED BELOW WHICH IS EQUAL TO 100% OF THE TAX SOUGHT TO BE EVADED AND DIRECT THE ASSES SEE TO PAY THE PENALTY SO IMPOSED. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO SIMPLY CONFIRMED WITHOUT GIVING ANY FINDING BY OBSERVING AS UNDER: THESE GROUNDS ARE ADJUDICATED TOGETHER BECAUSE CO MMON ISSUES ARE INVOLVED. IN THESE GROUNDS THE APPELLANT IS DISPUTING THE AOS ACTION IN IMPOS ING PENALTY U/S. 271(1)(C) IN HER CASE. THE APPELLANTS LOGIC IS THAT THE ADDITION WHICH HAS BE EN SUSTAINED IN APPEALS IS AN ESTIMATED ONE AND, THEREFORE, THE IMPOSITION OF PENALTY U/S. 271(1)(C) IN HER CASE IS NOT CORRECT AS NO CONCEALMENT HAS BEEN PROVED. HOWEVER, IT IS SEEN FROM THE APPELLAN TS OWN SUBMISSION THAT THE QUANTUM ORDER ON WHICH THE PENALTY HAS BEEN IMPOSED HAS BEEN ADJUDIC ATED BY THE LD. CIT(APPEALS) AND EVEN THE HONBLE ITAT HAS SUSTAINED THE ORDER OF LD. CIT(APP EALS). IN VIEW OF THIS, THE APPELLANTS SUBMISSION LOSSES ITS FORCE. THE IMPOSITION OF PEN ALTY BY THE AO IS CONFIRMED. THESE GROUNDS OF APPEAL ARE DISMISSED. AGGRIEVED, NOW ASSESSEE IS IN SECOND APPEAL BEFORE TRIBUNAL AGAINST THE CONFIRMATION OF PENALTY. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT FIRST OF ALL THE PENALTY IS LEVIED ON ESTIMATION OF INCOME AND THAT WAS ALSO CONFIRMED BY CIT(A) WITHOUT ANY BASIS. SECONDLY, N EITHER THE AO NOR THE CIT(A) IS SURE ABOUT THE CHARGE OF LEVY OF PENALTY WHETHER THE PENALTY I S FOR CONCEALMENT OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN VIEW OF THE SE FACTS, NOW THIS ISSUE IS SQUARELY COVERED BY THE DECISION OF THIS COORDINATE BENCH IN THE CASE O F ITA NO.1303/K/2010, SUVAPRASANNA BHATTACHARYA VS. ACIT, AY 2006-07 DATED 06.11.2015, WHEREIN IT HAS BEEN HELD AS UNDER: 6. WE SHALL NOW DEAL WITH THE QUESTION WHETHER PRO PER SATISFACTION WAS ARRIVED AT BY THE AO FOR INITIATING PENALTY PROCEEDINGS U/S.271(1)(C), I N THE COURSE OF CONCLUDING THE ASSESSMENT PROCEEDINGS, WHEREIN THE ADDITIONS IN RESPECT OF WH ICH PENALTY WAS IMPOSED WERE MADE. ON THE ABOVE ISSUE, THE FIRST ASPECT WHICH, WE NOTICE IS T HAT IN THE ORDER OF ASSESSMENT, WHICH WE HAVE EXTRACTED IN THE EARLIER PART OF THIS ORDER, NOWHER E SPELLS OUT OR INDICATES THAT THE AO WAS OF THE VIEW THAT THE ASSESSEE WAS GUILTY OF EITHER CONCEAL ING PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. THE OFFER TO TAX OF INCOME BY THE ASSESSEE HAS JUST BEEN 3 ITA NO.1744/KOL/2013 SMT. ALPANA SAHA, AY 200 5-06 ACCEPTED. IT IS NO DOUBT TRUE THAT IT IS NOT THE R EQUIREMENT OF THE LAW THAT THE SATISFACTION HAS TO BE RECORDED IN A PARTICULAR MANNER, ESPECIALLY AFTER T HE INTRODUCTION OF THE PROVISIONS OF SEC.271(1B) OF THE ACT WITH RETROSPECTIVE EFFECT FROM 1.4.1989. NEVERTHELESS, AS LAID DOWN BY THE HONBLE DELHI HIGH COURT IN THE CASE OF MS.MADHUSHREE GUPTA (SUPR A), THE POSITION OF LAW BOTH PRE AND POST SEC.271(1B) OF THE ACT IS SIMILAR, INASMUCH, THE AO WILL HAVE TO ARRIVE AT A PRIMA FACIE SATISFACTION DURING THE COURSE OF PROCEEDINGS WITH REGARD TO THE ASSESSEE HAVING CONCEALED PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS, BEFORE HE INITIATES PENALTY PROCEEDINGS PRIMA FACIE SATISFACTION OF THE AO THAT THE CASE MAY DESERVE TH E IMPOSITION OF PENALTY SHOULD BE DISCERNIBLE FROM THE ORDER PASSED DURING THE COURSE OF THE PROC EEDINGS. AT THE STAGE OF INITIATION OF PENALTY PROCEEDING, THE ORDER PASSED BY THE AO NEED NOT REF LECT SATISFACTION VIS-A-VIS EACH AND EVERY ITEM OF ADDITION OR DISALLOWANCE, IF OVERALL SENSE GATHE RED FROM THE ORDER IS THAT A FURTHER PROGNOSIS IS CALLED FOR. THE DECISION OF THE HONBLE SUPREME COU RT IN THE CASE OF MAK DATA (P) LTD. (SUPRA) HAS TO BE UNDERSTOOD IN THE CONTEXT OF THE FACTS OF THE SAID CASE. THE RELEVANT PORTION OF THE JUDGMENT IN THE AFORESAID CASE, READS THUS: 9. WE ARE OF THE VIEW THAT THE SURRENDER OF INCOME IN THIS CASE IS NOT VOLUNTARY IN THE SENSE THAT THE OFFER OF SURRENDER WAS MADE IN V IEW OF DETECTION MADE BY THE AO IN THE SEARCH CONDUCTED IN THE SISTER CONCERN OF TH E ASSESSEE. IN THAT SITUATION, IT CANNOT BE SAID THAT THE SURRENDER OF INCOME WAS VOL UNTARY. AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS HAS NOTICED THAT CERTAIN DOCUMENTS COMPRISING OF SHARE APPLICATION FORMS, BANK STATEMENTS, MEMORANDUM OF A SSOCIATION OF COMPANIES, AFFIDAVITS, COPIES OF INCOME TAX RETURNS AND ASSESS MENT ORDERS AND BLANK SHARE TRANSFER 8 DEEDS DULY SIGNED, HAVE BEEN IMPOUNDED I N THE COURSE OF SURVEY PROCEEDINGS UNDER SECTION 133A CONDUCTED ON 16.12.2 003, IN THE CASE OF A SISTER CONCERN OF THE ASSESSEE. THE SURVEY WAS CONDUCTED M ORE THAN 10 MONTHS BEFORE THE ASSESSEE FILED ITS RETURN OF INCOME. HAD IT BEEN TH E INTENTION OF THE ASSESSEE TO MAKE FULL AND TRUE DISCLOSURE OF ITS INCOME, IT WOULD HA VE FILED THE RETURN DECLARING AN INCOME INCLUSIVE OF THE AMOUNT WHICH WAS SURRENDERE D LATER DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS. CONSEQUENTLY, IT IS CLE AR THAT THE ASSESSEE HAD NO INTENTION TO DECLARE ITS TRUE INCOME. IT IS THE STA TUTORY DUTY OF THE ASSESSEE TO RECORD ALL ITS TRANSACTIONS IN THE BOOKS OF ACCOUNT, TO EX PLAIN THE SOURCE OF PAYMENTS MADE BY IT AND TO DECLARE ITS TRUE INCOME IN THE RETURN OF INCOME FILED BY IT FROM YEAR TO YEAR. THE AO, IN OUR VIEW, HAS RECORDED A CATEGORIC AL FINDING THAT HE WAS SATISFIED THAT THE ASSESSEE HAD CONCEALED TRUE PARTICULARS OF INCOME AND IS LIABLE FOR PENALTY PROCEEDINGS UNDER SECTION 271 READ WITH SECTION 274 OF THE INCOME TAX ACT, 1961. 10. THE AO HAS TO SATISFY WHETHER THE PENALTY PROCE EDINGS BE INITIATED OR NOT DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS AND THE AO IS NOT REQUIR ED TO RECORD HIS SATISFACTION IN A PARTICULAR MANNER OR REDUCE IT INTO WRITING. 7. THE REVENUE PLACES RELIANCE ONLY ON THE SENTENCE APPEARING IN PARA-10 OF THE JUDGMENT WITHOUT READING IT IN THE CONTEXT OF THE OBSERVATIO NS IN THE LAST PORTION OF PARA-9 OF THE SAID JUDGMENT. THEREFORE EVEN THE HONBLE SUPREME COURT S DECISION SUGGESTS THAT THE SATISFACTION NEED NOT BE RECORDED IN A PARTICULAR MANNER BUT FROM A R EADING OF THE ASSESSMENT ORDER AS A WHOLE SUCH SATISFACTION SHOULD BE CLEARLY DISCERNIBLE. IF THE AO ACCEPTS ALL THE CONTENTIONS OF THE ASSESSEE AND THE OFFER OF INCOME THAT HAS NOT BEEN DECLARED IN T HE RETURN OF INCOME TO TAX WITHOUT INDICATING EITHER DIRECTLY OR INDIRECTLY THAT THE ASSESSEE HAS CONCEALED PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME, IT CANNOT BE SAID THAT SATISFACTION FOR INITIATION OF PENALTY PROCEEDINGS IS DISCERNIBLE FROM THE ORDER OF ASSESS MENT. IF THE ASSESSEE IN GOOD FAITH OFFERS INCOME TO TAX VOLUNTARILY PRIOR TO ANY POSITIVE DETECTION BY THE AO, SUCH VOLUNTARY OFFER CANNOT BE TAKEN ADVANTAGE OF BY THE AO TO INITIATE PENALTY PROCEEDI NGS AGAINST THE ASSESSEE WITHOUT SPECIFYING THE REASONS WHY PENALTY PROCEEDINGS ARE INITIATED U/S.2 71(1)(C) OF THE ACT. IN THE PRESENT CASE, WE HAVE READ THE ORDER OF ASSESSMENT AS A WHOLE AND ARE SAT ISFIED THAT SATISFACTION FOR INITIATION OF PENALTY PROCEEDINGS IS NOT DISCERNIBLE FROM THE ORDER OF AS SESSMENT. WE THEREFORE CONCUR WITH THE ARGUMENT OF THE LEARNED COUNSEL FOR THE ASSESSEE TH AT INITIATION OF PENALTY PROCEEDINGS WAS NOT 4 ITA NO.1744/KOL/2013 SMT. ALPANA SAHA, AY 200 5-06 PROPER IN THE PRESENT CASE AND ON THAT GROUND THE I MPOSITION OF PENALTY U/S.271(1)( C) OF THE ACT IS UNSUSTAINABLE. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES AND TH E PRECEDENTS CITED, THERE IS NO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS O F INCOME BY THE ASSESSEE AND EVEN REVENUE IS UNABLE TO DISCHARGE ITS ONUS. ACCORDINGLY, WE DELE TE THE PENALTY AND ALLOW THE APPEAL OF ASSESSEE. 5. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21.03.2016 SD/- SD/- (M. BALAGANESH) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 21ST MARCH , 2016 JD. SR. P.S COPY OF THE ORDER FORWARDED TO: 1. APPELLANT SMT. ALPANA SAHA, B. C. ROAD, KALITALA, DIST. BURDWAN-713101 2. RESPONDENT ACIT, CIR-2, BURDWAN. 3. CIT(A) , DURGAPUR 4. CIT , DURGAPUR 5. DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .